EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925753
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Xtek Pty Ltd applied for a TCO in respect of certain hook and line rigging kits on 20 July 2009.
Instrument
TCO No 0925753 was made on 09 October 2009. It declares that those certain hook and line rigging kits are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0925753 is taken to have come into force on 20 July 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted by the Parliament of Australia to regulate customs duties and provide a framework for their collection. The Tariff Concession Orders, introduced under Part XVA of the Act, aim to address gaps in the availability of certain goods within Australia by allowing the Chief Executive Officer of Customs to apply lower rates of customs duty on specified goods if no substitutable goods are produced in Australia. The policy objective is to ensure that essential goods are accessible to Australian consumers and businesses without imposing undue financial burdens through excessive tariffs. The instrument in question, Tariff Concession Instrument No. 0925753, was made to facilitate the importation of certain hook and line rigging kits, providing a tariff concession from the general duty rate of 5% to free duty, effective from 20 July 2009. This concession was granted following an application by Xtek Pty Ltd and subsequent confirmation by the CEO that no substitutable goods were being produced in Australia, thus meeting the core criteria for a tariff concession order.
Scope and Application
The Tariff Concession Instrument No. 0925753 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specific goods, in this case, Xtek Pty Ltd’s application for certain hook and line rigging kits. The instrument facilitates the reduction of customs duty on these goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This concession is applicable across the Commonwealth of Australia and is administered by the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria set out in the Act. The application process involves a public notification in the Gazette, inviting objections which, in this instance, were not received. The concession does not impose any liabilities or disadvantages on persons other than the Commonwealth and benefits importers who can claim duty refunds for imports made since the effective date of the application. The Act allows for further regulation and specification through subordinate instruments, extending or restricting its application as necessary.
Key Provisions
The Customs Act 1901 (the Act) under section 269F, permits an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in relation to specific goods. If the application is not for goods outlined in section 269SJ, which specifies those goods that cannot be subject to a TCO, the CEO must then determine whether the application meets the core criteria set out in section 269C. This section mandates that the application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines terms such as ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’ in relation to the TCO application. If the CEO is satisfied that the application meets these criteria, they must make a written order, the TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on the parties or entities it governs are primarily centred around the application process for a TCO. The applicant must ensure that the goods for which the TCO is sought are not listed in section 269SJ and that no substitutable goods were produced in Australia on the date the application was made. The CEO, on their part, must assess the application against the criteria outlined in section 269C and make a decision accordingly. The CEO must also publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made, to lodge a submission. Once the TCO is made, the CEO must ensure that it does not affect the rights of any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration. The TCO also does not impose any liabilities on any person.
Section 269P(3) of the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach of the Act's provisions. However, it is implied that any breach of the Act's provisions, such as submitting a false application for a TCO or not adhering to the requirements set out in the Act, could potentially lead to legal consequences. These could include civil penalties such as fines or criminal penalties such as imprisonment, depending on the severity and nature of the breach. However, the exact penalties are not specified in the Act and would be determined by a court or tribunal in the context of a specific case.